Congressional Leaders Reach Deal on 10-Month “Doc Fix”

February 17, 2012

We have breaking news from Capitol Hill, where Senate and House negotiators have reached a tentative agreement on the “doc fix”, so that physicians will not have payments slashed by 27 percent later this month. As of 5:30 PM EST on Thursday, no House or Senate votes on this have been scheduled. It was only recently released to the rank-and-file members still reviewing the “agreement”.

We wanted to report this information, but we also want to appropriately caution readers that this is subject to change and there is not a guarantee that this will be agreed to by the full House or Senate. As you might imagine, the situation is very fluid and there are a lot of rumors floating around.

Summary of Provisions “Middle Class Tax Relief and Job Creation

Physician Payment Rates – This provision prevents a 27.4 percent cut in Medicare physician payment rates slated to begin on March 1, 2012, and instead freezes payment rates at their current level though December 31, 2012. This provision also requires the Government Accountability Office (GAO) and Health and Human Services (HHS) to submit reports to assist Congress in the development of a long-term replacement to the current Medicare physician payment system. The Congressional Budget Office (CBO) estimates this provision would increase spending by $18 billion from 2012 through 2022.

Physician Work Geographic Adjustment – This provision extends the floor on the adjustment to the work portion of payments for physician services that accounts for the geographic area where a physician practices. This provision increases payments to physicians in the 54 of the 89 Medicare geographic areas that would otherwise have an adjustment value below the floor. Additionally, the provision requires the Medicare Payment Advisory Commission (MedPAC) to examine whether any work geographic adjustment is needed, and if so, at what level it should be applied, and the impact of the floor on beneficiary access to care. CBO estimates this provision would increase spending by $400 million from 2012 through 2022.